Tag: regulation

California: San Benito County Readies to Ban Flavors
As a statewide ballot question in November’s election about whether flavored e-cigarettes and other tobacco products should be banned approaches, San Benito County has decided to take the first step towards banning the products.
At its Aug. 9 meeting, the county’s Board of Supervisors approved the first reading of an ordinance that will ban the sale of flavored tobacco products in all areas in the county, including the cities of Hollister and San Juan Bautista, reports Halfwheel. The approval was unanimous among the five supervisors.
The ordinance, which also includes a ban on the sale of single-use or disposable e-cigarettes, will get a second reading at the board’s August 23 meeting. If it passes as written, the ban would go into place 30 days after is adopted.
San Benito County has approximately 64,000 residents, and is located southeast of San Jose.
August 20, 2022
Charlie’s Holdings: 58% Revenue Growth First Half 2022
Charlie’s Holdings, parent to Charlie’s Chalk Dust e-liquids, says its best-selling e-liquids are in the substantive review phase of the U.S. Food and Drug Administration’s premarket tobacco product application (PMTA) process.
The company remains in the select minority of 2020 PMTA submissions that are still viable; the company also submitted PMTAs for more than 700 additional products prior to the May 14, 2022 FDA deadline, according to a press release. Prior to the FDA’s May 14 deadline, Charlie’s successfully filed new PMTAs for its synthetic nicotine Pacha Syn products.
“Charlie’s positive momentum continued in the second quarter and first half of 2022, highlighted by our 36 percent and 58 percent year-over-year revenue growth,” stated Matt Montesano, CFO for Charlie’s Holdings. “We continued to diversify and expand Charlie’s robust product line, as represented by our new 12ml Pacha Syn Disposable line and our refreshed Pacha Syn e-liquid line, both of which launched in the second quarter of 2022.
“At the same time, we continued to operate the business with tight fiscal controls, as demonstrated by our further reduction of operating expenses, as a percentage of revenue, to 46 percent during the second quarter.”
Financial Results for the Six Months Ended June 30, 2022:
Revenue: For the six months ended June 30, 2022, revenue was $15.5 million, an increase of $5.7 million, or 58%, compared with $9.8 million for the same period last year. The increase in revenue was primarily due to a $4.8 million increase in sales of our nicotine-based vapor products and a $0.9 million increase in sales of our hemp derived products. The increase in our nicotine-based vapor product sales was driven by sales of our new 8ml Pacha Syn Disposable line, which launched in December 2021, as well as our 12ml Pacha Syn Disposable and refreshed Pacha Syn e-liquid lines, both of which launched in the second quarter of 2022.
Gross Profit: For the six months ended June 30, 2022, gross profit was $6.5 million, an increase of $1.4 million, or 28%, compared with $5.1 million for the same period last year. The resulting gross margin was 41.9%, compared with 51.6% for the same period in 2021. The decrease in gross margin is primarily due to an increased percentage of our sales coming from Charlie’s Pacha Syn Disposable product line, which carries a lower unit margin relative to the Company’s other products, as well as comparatively higher freight and delivery expenses and a larger reserve for inventory obsolescence related to certain of our retired hemp-derived wellness products.
Total Operating Expenses: For the six months ended June 30, 2022, total operating expense, including general and administrative, sales and marketing expense and research and development costs, were $6.7 million, an increase of $1.2 million, or 22%, compared with $5.5 million for the six months ended June 30, 2021. The increase in operating expenses was primarily attributable to sales and marketing costs related to enhanced trade-show activity during the quarter in furtherance of our plan to grow market share across the nicotine and hemp-derived product categories and $0.8 million in research and development costs associated with our 2022 PMTA submissions. Operating expenses as a percentage of revenue decreased to 43%, from 56%, for the periods compared.
Operating Loss: For the six months ended June 30, 2022, operating loss was $0.2 million, a decrease of $0.2 million, or 51%, compared with an operating loss of $0.4 million for the six months ended June 30, 2021.
Net Income/Loss: For the six months ended June 30, 2022, net income was $0.1 million, compared with a net loss of $0.4 million for the six months ended June 30, 2021.
August 18, 2022
Yach: Ukraine Offers Chance to Transform Tobacco

Photo: Hugo
The crisis in Ukraine offers an opportunity to transform tobacco use across eastern and central Europe.
By Derek Yach
Vladimir Vorotnikov, writing Vapor Voice‘s sister publication in Tobacco Reporter’s August 2022 issue, outlined how Russia’s invasion of Ukraine has upended well-established supply chain and business relationships that have been in effect for decades. In fact, a careful read of Balkan Smoke by Mary C. Neuberger traces the roots of these relationships way back to Bulgaria in the 1920s. Vorotnikov discussed the impact of sanctions on Russian tobacco production, the emergence of illicit trade in the region, and more recently, the reestablishment of cigarette production in Ukraine.
He does not discuss the massive growth over the past few years in new reduced-risk nicotine products—led by IQOS—across eastern and central Europe. The editor makes the point that Russia is (was) one the largest markets for IQOS. My own observations during a visit to Kyiv in late October 2021 were that a range of vape products and heated-tobacco products were readily available across the city despite posters funded by Bloomberg Philanthropies near the Parliament proclaiming that they were dangerous.
An anti-vaping poster in Kyiv
(Photo courtesy of Derek Yach)
This is a time of profound transition for the region. Amid the horrors of war and the human tragedies it continues to bring to the people of Ukraine are opportunities to reduce future deaths from the single largest cause of premature death in the region—and especially among men—combustible tobacco products. As rebuilding begins—as it inevitably will—government, business and health professionals need to grasp the chance to avoid rebuilding the tobacco industry in the image of the past and rather take the high ground of health and make reduced-risk products the easily available option while phasing out combustible sales.
For governments, this means adopting risk-proportionate regulations that build on the approaches proposed by the recent Javed Khan report for the United Kingdom, and on the authorizations of a range of reduced-risk products by the U.S. Food and Drug Administration. Ukraine and the neighboring countries relied on FDA guidance in relation to Covid vaccine advice—now is the time to draw upon their guidance to accelerate access to reduced-risk products, citing the FDA’s comments that they are deemed “appropriate for the protection of public health.”
Tax and other regulatory approaches could be applied to accelerate the transition. Further, governments of the region need to step up investments in customs and excise oversight to stop large-scale illicit trade taking hold—as it has in the occupied territories of Georgia following Russian invasion in 2008.
The Russian government also has an obligation to protect the health of its people and take regulatory steps to ensure that the progress made by Philip Morris International, Japan Tobacco International and BAT is increasing their revenue from heated-tobacco products at the cost of combustibles. Slippage with regard to these gains will translate into a return to the very high smoking rates, and associated death rates, of the past.
Government actions will be limited, though, unless the three leading tobacco companies (PMI, JTI and BAT) active in the region commit to take concerted efforts to accelerate their transition out of combustibles and publicly clarify what “withdrawing from Russia” means. Are they continuing to profit from Russian cigarette sales albeit through local companies? Are those companies obliged to push ahead with reduced-risk products, or will they revert to cigarettes?
Outside of Russia, leading tobacco companies could communicate the benefits of switching, take measures to clamp down on illicit trade and tighten youth access to all nicotine products, through joint action. Such bold actions would give them a chance to show their seriousness to transformation—something investors should reward.
United Nations agencies have a role to play at this time. Evidence emerging from inside Ukraine suggests that smoking rates have increased among those in the military and possibly among displaced peoples. This is understandable given the unprecedented stress to which people are exposed. The current U.N. response has been to ignore this reality and simply continue to support policies that ban cigarette sales during conflicts—something that is probably ignored. A far better way forward is to support people who smoke or seek nicotine to have ready access to nicotine-replacement products and approved reduced-risk nicotine products. This would mean that a generation of people may well emerge from the war with lower overall risks to their health.
War and tobacco use are intimately linked and currently interacting in dangerous ways to the health of populations. We should not wait for the transition to peace and health to begin before taking steps to accelerate the transition of smokers away from combustibles.
A global health expert and anti-smoking advocate for more than 30 years, Derek Yach is the owner of Global Health Strategies. Previously, Yach was the director of the Foundation for a Smoke-Free World and a World Health Organization cabinet director and executive director for noncommunicable diseases and mental health. He was deeply involved with the development of the Framework Convention on Tobacco Control.

August 15, 2022
Judge Rules Delta-8 THC Legal for Sale in Kentucky
A judge in the U.S. state of Kentucky has sided with the state’s hemp industry over law enforcement.
The judge ruled that products containing delta-8 THC derived from hemp are legal, a hemp trade association said in a news release.
The Kentucky Hemp Association (KHA) – which sued the state over the issue a year ago – celebrated the ruling as “a huge win for farmers and retailers.”
Police had begun raiding licensed Kentucky hemp shops in an effort to crack down on the delta-8 THC market.
The enforcement stemmed from the state Department of Agriculture releasing a letter that referred to delta-8 THC hemp products as a “Schedule 1 controlled substance,” illegal under U.S. law, despite the federal legalization of hemp in 2018, according to mjbizdaily.
The KHA then sued the department, the state agriculture commissioner and the state police commissioner to halt the raids.
“These delta-8 raids on retailers were … a challenge we were ready and willing to face in order to protect retailers of Kentucky Proud Hemp products,” KHA Vice President Tate Hall said in the release.
August 15, 2022
Malaysian Think Tank Wants Change to Tobacco Ban Bill

Credit: Butenkow
A think tank in Malaysia has urged the Parliamentary Special Select Committee (PSSC) reviewing the tobacco generational endgame (GEG) bill to remove Clause 17 of the legislation.
The clause criminalises smoking, vaping as well as the possession of any tobacco products or smoking devices by those born in 2007 and onwards.
Galen Centre for Health and Social Policy chief executive officer Azrul Mohd Khalib said the law should instead put the burden on retailers, companies and corporations to not sell or supply tobacco and vape products to the GEG generation.
“Clause 17 makes the proposed legislation vulnerable to accusations of selective [prosecution], creates stigma and discrimination and marginalizes a group of people who will need support and assistance,” said Azrul in a statement. “Despite our best efforts, in the future there will be people in the GEG group who smoke and vape, and become addicted to nicotine. Should they be punished?
“The legislation should ensure that it is an offence to legally sell or supply tobacco or vape products to those born from Jan 1, 2007.”
Azrul stressed that anyone addicted to nicotine has the right to be treated equally under the law, with compassion and dignity.
He said the GEG bill should not be allowed to disproportionately affect young people, people from low income groups and vulnerable populations.
August 15, 2022
Total Ban on Sales of Vaping Products Constitutional

Credit: Kraken Images.
A group of merchants brought a Federal Lawsuit against the Town of Eastchester, New York alleging that the town’s new anti-vaping law was unconstitutional. The law was upheld by a Federal Court in the Southern District of New York.
At the September 3rd, 2019 Town Board meeting, Eastchester was one of the first Towns to adopt a local law to prevent the sale of electronic nicotine-delivery system (ENDS) products within the Town.
The law which is known as “Electronic Nicotine Delivery Product Law” prohibits the sale of tobacco substitutes containing nicotine from being sold in the town, according to a local news source. This includes, but is not limited to: e-cigarettes, vapes, vaporizers, vape pens, lozenges or other candy, drinks, liquid nicotine or other e-liquids or inhalers.
Town Supervisor Anthony Colavita and the Town Board were also the first to opt out of participating in the New York State Marijuana Retail Sales Program as well.
Supervisor Colavita stated, “Keeping our citizens, especially our youth, safe by limiting accessibility to the products specified in our law is our top priority. I am glad the Town of Eastchester prevailed.”
August 11, 2022
‘FDA Took Unfair Shortcuts in Reviewing PMTAs’

Image: smolaw11
In establishing whether a nicotine product is appropriate for the protection of public health, the U.S. Food and Drug Administration held its Center for Tobacco Products (CTP) reviewers to a lower standard than the companies submitting premarket tobacco product applications, according to Alex Norcia writing in Filter.
Citing documents obtained through the Freedom of Information Act, Filter describes procedures such as batching and bracketing, which allowed the CTP to apply conclusions to categories of products rather than evaluating them separately. “Despite imposing extremely onerous bureaucratic requirements on applicants, the agency was happy to find ways to cut through its own paperwork,” writes Norcia.
“It’s clear that FDA allows itself efficient shortcuts that it has denied to applicants,” Clive Bates, director of The Counterfactual, told Filter.
“The problem has always been that FDA’s extraordinarily burdensome process was obviously tremendously wasteful for applicants, but of course it was always going to be unmanageable for the assessors in FDA. Without this sort of shortcut, the PMTA process would have become a human resources nightmare. So FDA has allowed itself the kind of efficiencies it should have offered to the applicants—batching and bracketing thousands of near-identical products.”
August 11, 2022
City Council in Bangor, Maine Bans Flavored Vapes, Again
Credit: Ianm35
The Bangor City Council, in the U.S. state of Maine, met Monday evening and decided in a 6 to 1 vote to instate an ordinance to ban the sale of flavored tobacco products for a second time.
The ordinance will prevent the sale of all flavored tobacco products, including e-cigarettes and menthol-flavored products, citywide. According to the city council’s meeting agenda, the ordinance will prevent the sale, display, marketing, and advertising of flavored tobacco products, according to News Center Maine.
The city previously banned flavored tobacco products back in October but repealed its decision earlier this year after a procedural error.
If broken, the ordinance also imposes a fine between $50 and $100 for the first violation within a 24-month period and $300 and $1,000 for each subsequent offense within those 24 months.
August 9, 2022
Chinese Car Maker BYD Gets Vape Production Permit

Credit: Robert
There has been speculation for a few years now that the BYD, one of the largest companies in China, had plans to enter the e-cigarette market with its own brand. Better known as a car manufacturer and battery producer, BYD Electronic shares surged on the Stock Exchange of Hong Kong by as much as 12.5 percent Thursday after the company announced a subsidiary has been granted a license to produce vaping devices.
“The unit has been granted a tobacco production business license by the State Tobacco Monopoly Administration [STMA],” BYD Electronic said on its WeChat account, according to YiCai Global. Such permits only started to be issued this year in accordance with new regulations. As of Aug. 4, more than 130 firms had been licensed, according to the STMA website.
“The BYD subsidiary already has a full range of electronic atomization products ready to be patented and is investing in automated production lines, said BYD Electronic, which is the sister company of electric car and battery giant BYD Automobile,” the company stated in a release. “At present, BYD Electronics has completed the patent layout of a full range of electronic atomization products and the construction of automated production lines, fully integrating its own comprehensive capabilities such as new material research and development, precision molds, product design and development, and intelligent manufacturing, and is committed to becoming a Practitioners and leaders in the field of health harm reduction, providing users with excellent products of quality and peace of mind.”
In 2021, BYD said its e-cigarette business was mainly based on brand OEMs, and “there is no independent listing plan.” BYD Electronics has operated in the e-cigarettes field since 2018. It launched the brand “Beem Core” for ceramic atomizing core technology in 2021.
Once it starts full production, BYD will go head to head with industry leader Smoore International, which held 22.8 percent of global market share last year, according to Frost & Sullivan research.
BYD Electronic was spun off from Shenzhen-based conglomerate BYD in 2007 to make cell phone components and printed circuit boards. Its business remit has since expanded to include smartphones, laptops, masks and now, e-cigarettes.
BYD joins industry late-comer Luxshare Precision, a global designer and manufacturer of cable assembly and connector system solutions, and several other China-based manufacturing enterprises as new vaping industry players.
August 6, 2022
FDA Received Nearly 1 Million Synthetic PMTAs, No Approvals

Credit: JHVEPhoto
One month into his new job, Brian King is already praising his agency’s hard work. The director of the U.S. Food and Drug Administration’s Center for Tobacco Products (CTP) released a statement that he wanted to make it “unequivocally clear” that the agency was “working diligently” to process synthetic nicotine premarket tobacco product applications (PMTAs).
“A substantial number of applications were submitted by May 14 – nearly one million from more than 200 separate companies – with some several thousand pages long,” King stated. “Preparing these applications for review takes several steps and submissions varied widely in their organization, size, and completeness of data, which impacts the time it takes to process the information.”
Amanda Wheeler, president of the American Vapor Manufacturers Association (AVM), Tweeted, “Read between the lines: Millions of applications submitted, ZERO approved, yet King assures us the system is working. We do know the only thing preventing vape products from saving lives is the FDA itself, rigging the system in favor of prohibition over harm reduction,” in response to King’s statement.

Despite the challenges of reviewing PMTAs, King stated that the agency was “making significant progress” in processing and reviewing the applications. The FDA has issued refuse-to-accept (RTA) letters for more than 88,000 products for applications that “do not meet the criteria” for acceptance. Applications are required to provide important information needed for processing and reviewing.
“Without the required information, applications cannot proceed past the acceptance phase of the review process,” King stated. “The RTA letters state that it is illegal to sell or distribute in the U.S. marketplace any new tobacco product that has not received premarket authorization.
Of the nearly a million applications submitted by May 14, the FDA only accepted an estimated 350, with the vast majority being for e-cigarette or e-liquid products, according to the statement. Accepted applications are then evaluated in the filing stage before going under scientific review.
“The substantive review phase includes evaluation of the scientific information and data in an application, which often results in follow-up questions and conversations with companies, including in situations where elements of an application raise questions needing clarification,” stated King. “It is only after the substantive phase that a company may be granted a marketing order. If no marketing order is granted, it remains illegal to market the product. To date, no non-tobacco nicotine product has received a marketing granted order.”
All bark, no bite
After July 13, 2022, a non-tobacco nicotine product can only be legally marketed in the United States if it has received a marketing order from the FDA. This means that it is illegal for a retailer or distributor to sell or distribute a synthetic nicotine products is in violation of the law and its manufacturer, retailer, or distributor may be subject to FDA enforcement.
King stated that the agency’s compliance and enforcement work is a multi-step process that cannot “happen overnight.” it takes time to ensure that any enforcement taken is supported by the available evidence with respect to the legal standards. Typically, the FDA will first issue warning letters to promote compliance and then follow up to ensure the violations addressed in the warning letter are corrected. If firms continue to violate the law, the FDA can pursue further actions, such as civil money penalties, seizures, and injunctions.
Many retailers simply ignore the FDA warnings. One owner told Vapor Voice that they “know” the agency is overworked and understaffed and is unlikely to follow up or pursue further steps. The agency has also made some very public mistakes over the past month, including its reversal of Juul’s marketing denial order (MDO), that has damaged the agency’s public perception.
While there isn’t much data surrounding what tobacco products remain on the market that have received warning letters, however, numerous companies on the agency’s MDO list still market products in the U.S.
It isn’t only for tobacco products that the agency doesn’t enforce its warnings. A considerable proportion of drug supplement products remain available for purchase after issuance of FDA warning letters, according to a research letter published in the July 26 issue of the Journal of the American Medical Association. Researchers found that the FDA issued warning letters regarding 31 supplement products. Only one of these 31 products was recalled by the manufacturer.
At a mean of six years following the issue of warning letters, nine of the products (29 percent) remained available for purchase online, according to the authors. Four of these nine products (44 percent) listed the presence of at least one prohibited ingredient on the label: One label declared the prohibited ingredient included in the FDA warning letter and three listed other FDA-prohibited ingredients. Five of the nine products were found to contain at least one FDA-prohibited ingredient after chemical analysis: Four products contained one prohibited ingredient and one product contained three. Two products contained the ingredient for which the FDA issued the warning letter.
Despite its challenges, the FDA issued 17 new warning letters on Aug. 1 to manufacturers for marketing products without FDA approval. On July 28, the agency issued 102 warning letters to retailers for illegally selling non-tobacco nicotine products to underage purchasers.
“Our goal is clear communication and transparency, and toward that end, we intend to include information about non-tobacco nicotine products in our regular metrics reporting in the future,” stated King. “To keep stakeholders and the general public informed, we also launched a non-tobacco nicotine product webpage that includes information about how synthetic nicotine is made and our regulation of non-tobacco nicotine products.”
August 4, 2022